2023 (2) TMI 413 - AT - Income Tax

Assessment for 2006-07 Void due to Limitation Period

The Tribunal ruled that the assessment for Assessment Year 2006-07 was void-ab-initio as it exceeded the limitation period under Section 153C. The ... Admission of additional grounds - HELD THAT:- There is no reason to restrict the power of Tribunal u/s 254 only to decide the grounds which arise from the order of the Commissioner of Income Tax (Appeals) and that both the assessee and department have a right to file an appeal/cross objections before the tribunal and the Tribunal should not be prevented from considering questions of law arising in assessment proceedings although not raised earlier. It has further held that the view that tribunal is confined only to issues arising out of the appeal before CIT(A) is too narrow a view to take of the powers of the tribunal. We further find that the case laws relied upon by DR are not applicable to the present facts of the case. Thus as per decision rendered in the case of National Thermal Power Co. Ltd. [1996 (12) TMI 7 - SUPREME COURT] admit the additional ground and proceed to dispose of the appeal. Validity of assessment u/s 153C - period of limitation - assessee is challenging the assessment framed under Section 153C/143(3) of the Act being barred by limitation and therefore without jurisdiction - HELD THAT:- Since the date of receipt of assessment/ documents by the AO of the assessee was on 24th / 28th June 2013, the date of search in the case of the assessee in terms of proviso to Section 153C will be F.Y. 2013-14 and the relevant assessment year would be A.Y. 2014-15. Accordingly, the six assessment year for which notice could have been issued under Section 153C of the Act will be for A.Y. 2008-09 to A.Y. 2013-14. The impugned A.Y. 2006-07 being beyond the period of six years, according to us, is barred by limitation. See case of RRJ Securities Ltd [2015 (11) TMI 19 - DELHI HIGH COURT] Revenue has not placed any contrary binding decision in its support nor has placed on record any material to demonstrate that the aforesaid decision rendered by Hon’ble Delhi High Court in the case of RRJ Securities Ltd. (supra) has been set aside/stayed or overruled by higher judicial forum - Decided in favour of assessee. Issues:1. Jurisdiction of the assessment under Section 153C/143(3) of the Act.2. Admissibility of additional grounds challenging the assessment.3. Validity of the assessment for Assessment Year 2006-07.Analysis:Issue 1: Jurisdiction of the assessment under Section 153C/143(3) of the ActThe case involved a search and seizure operation at the premises of a company, leading to initiation of proceedings under Section 153C of the Act against the assessee. The assessee contended that the notice issued for Assessment Year 2006-07 was beyond the six-year limitation period specified in the proviso to Section 153C. The assessee relied on the decision of the Honorable Delhi High Court in CIT vs. RRJ Securities Ltd. to support the argument that the assessment for the impugned year was barred by limitation. The Tribunal agreed with the assessee, holding that the assessment for Assessment Year 2006-07 was indeed beyond the six-year limitation period and, therefore, void-ab-initio. The Tribunal set aside the assessment order on this ground.Issue 2: Admissibility of additional grounds challenging the assessmentThe assessee raised an additional ground challenging the jurisdiction of the assessment, arguing that the assessment was without jurisdiction and should be quashed. The Revenue objected to the admissibility of the additional ground, contending that only grounds arising from the CIT(A)'s order could be raised before the Tribunal. However, the Tribunal, following the decision of the Honorable Apex Court in National Thermal Power Co. Ltd. vs. CIT, admitted the additional ground as it pertained to a legal issue going to the root of the matter. The Tribunal proceeded to dispose of the appeal considering the additional ground.Issue 3: Validity of the assessment for Assessment Year 2006-07The primary issue raised by the assessee in the appeal was the confirmation of additions by the CIT(A) based on a photocopy of the agreement, instead of the original. Additionally, the assessee challenged the assessment for Assessment Year 2006-07 on the grounds of jurisdiction and validity. The Tribunal, however, focused on the jurisdictional aspect, finding that the assessment for the impugned year was indeed beyond the limitation period specified in the proviso to Section 153C. As a result, the Tribunal allowed the appeal of the assessee, setting aside the assessment order for Assessment Year 2006-07.In conclusion, the Tribunal found the assessment for Assessment Year 2006-07 to be void-ab-initio due to being beyond the limitation period specified in Section 153C. The Tribunal admitted the additional ground challenging the jurisdiction of the assessment and set aside the assessment order on this basis, rendering other grounds raised by the assessee academic and not adjudicated.